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Amazon Liable for Defective Third-Party Products Rules CA Appellate Court

‘It is impossible to overstate the magnitude of this ruling’

By Evan Symon, August 14, 2020 2:30 pm

On Thursday, California’s 4th District Court of Appeal in Santa Ana found that Amazon.com can now be held liable for injury for selling defective products from third party sellers in its online marketplace.

The ruling has grouped Amazon with other retailers who face the same liability risk when selling online, as per state product liability law. Thursday’s decision also overturned the previous state Superior Court ruling in San Diego, which had found Amazon to be a “service provider” instead of a “retailer,” and therefore not being responsible for liability.

The plaintiff of the case, Angela Bolger, had bought a laptop battery on Amazon from a seller called “E-Life,” the working name for Hong Kong battery seller Lenoge Technology. Bolger said that the battery had burst into flames when used, burning her arms, legs, and feet, as well as damaging her laptop.

Amazon argued that it wasn’t liable because it did not distribute, manufacture, or sell that product, and that it was only available on its website from a third-party seller order.

The Appellate Court didn’t agree with Amazon’s stance. It noted that the product had been listed on Amazon, was stored in an Amazon warehouse, had payment facilitated by Amazon, and shipped it out in Amazon packaging, proving it to have a hand in getting it to Bolger and thus liable under California law.

“Amazon placed itself between Lenoge and Bolger in the chain of distribution of the product at issue here,” explained the court in its ruling. “Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product, and shipped the product in Amazon packaging to her. Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer.”

The court also found a federal statue in favor of the plaintiff, the Communications Decency Act of 1996, noting that “It does not apply here because Bolger’s strict liability claims depend on Amazon’s own activities, not its status as a speaker or publisher of content provided by Lenoge for its product listing.”

‘It is impossible to overstate the magnitude of this ruling.’

Legal experts have been surprised by the ruling, as Amazon had been avoiding cases like Bolger’s for years.

“Amazon has successfully avoided being liable for other sellers selling through their website for years,” noted Maryland-based product liability lawyer Jim Dunham in an interview with the Globe. “Most courts have said they’re not a seller at all, which makes California’s case interesting. They’re pretty much saying that, in California, if it’s on the website for sale, they’re selling it.

“If it continues to hold up, Amazon is going to have to take a step back now and reconfigure how they sell all of these products others want to sell with the liability risk. That means company verification of these products, and with thousands upon thousands of sellers, multiplied by many more products, that is a huge commitment. A very expensive commitment. It’s that big. They’re now liable for pretty much anything on there now. That’s a lot of potential lawsuits and enough to potentially put a dent in their earnings. And that’s just California. It’s that big.

“But, remember, Amazon has proven to have a lot of fight in them, so they’ll bring this up further.”

Bolger’s lawyer, Jeremy Robinson, had a more succinct statement after the ruling on Thursday. “It is impossible to overstate the magnitude of this ruling. Consumers across the nation will feel the impact of this.”

California’s ruling may affect other rulings nationwide, including suits in Ohio, Texas, and Pennsylvania.

Amazon is expected to bring the case to a higher court in the near future.

Evan Symon
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20 thoughts on “Amazon Liable for Defective Third-Party Products Rules CA Appellate Court

  1. It seems like there should be a simple fix to this. Amazon just needs to get an effective indemnification agreement from its third party sellers (I would be surprised if it did not already have one) and only do business with companies that would be good for any reasonable losses.

    1. Shopify only helps you to easily make your own webshop. They don’t store your goods in their warehouses, they don’t package and ship them in Shopify-branded boxes. That is what got Amazon in this case – that they’re not just bringing buyer and seller together like Ebay, but also offer to handle the sellers’ goods as if they were their own (for a larger cut, obviously).

  2. How do we know if Amazon/Jeffie Bezos is just pulling another fast one by saddling his competitors with another burden as he attempted to do with his $15/hr. for Amazon employees (while generally cutting their hours?)?

    “Amazon has successfully avoided being liable for other sellers selling through their website for years,” noted Maryland-based product liability lawyer Jim Dunham in an interview with the Globe. “Most courts have said they’re not a seller at all which makes California’s case interesting. They’re pretty much saying that, in California, if it’s on the website for sale, they’re selling it.

    “If it continues to hold up, Amazon is going to have to take a step back now and reconfigure how they sell all of these products others want to sell with the liability risk. That means company verification of these products, and with thousands upon thousands of sellers, multiplied by many more products, that is a huge commitment. A very expensive commitment. It’s that big. They’re now liable for pretty much anything on there now. That’s a lot of potential lawsuits and enough to potentially put a dent in their earnings. And that’s just California. It’s that big.”

  3. No grammar, no sentence structure, you do not know the correct use of it’s or the difference between effect and affect. And, this is likely a bad legal decision.

  4. A similar case is now pending in Pennsylvania. A federal appeals court (the Third Circuit) ruled that Amazon is liable. under Pennsylvania law. They then then certified the question of law to the Pennsylvania Supreme Court, where it is pending.

  5. Liberals tear down. Success means you have a giant target on your back. Leftists like Bezos never seem to see this until the knife is in their back. Even then he will try to buy dispensation by backing all the fringe leftist policies and by giving money to groups that are determined to tear down society.

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